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I'm not going to beat her up for having to turn the car back in due to unemployment but : Speaking of unemployment, she should be cutting way back for awhile to adjust to the difference in income.
Cutting back means : Cooking at home, cutting back on cable package, fingernails and toes can be done at home, no more mall cruising ( mindless spending )
She does have her tax refund coming but that does not mean a free for all. She should buy an even cheaper car say : $ 3,000 and bank the other $3,000 .
I know this is not the frugal forum but she could LEARN alot coming to C-D and reading how to save money !
I'm not going to beat her up for having to turn the car back in due to unemployment but : Speaking of unemployment, she should be cutting way back for awhile to adjust to the difference in income.
Cutting back means : Cooking at home, cutting back on cable package, fingernails and toes can be done at home, no more mall cruising ( mindless spending )
She does have her tax refund coming but that does not mean a free for all. She should buy an even cheaper car say : $ 3,000 and bank the other $3,000 .
I know this is not the frugal forum but she could LEARN alot coming to C-D and reading how to save money !
I have to agree. After finding out what her pay off was on the van and how much she paid for a new one. I think its absurd she went this route. Ahh well.
My best advice, if there is a loan amount left over... Have no contact with the creditors. If they contact your cell phone, it's illegal for them to do so.
Incorrect, and do not blindly make assumptions without knowing what is legal and not legal. If a person creates a loan contract and gives the creditor their cell phone number as a good contact number, the contract (fine print) gives the creditor or any authorized agent of the creditor to contact that number. Also, if you give the number to a rep of the financing company "as a good contact number" you are verbally giving them permission to contact you on that number. There is a very high percentage of people who only have cell phones - it doesn't make sense for a bank/creditor to issue credit with no way to contact the debtor, you think?
The only way to legally have them stop contacting by phone is by submitting a written cease and desist letter stating they are no longer welcome to contact you by phone.
OK, this is what happened to me last year in February 2010.
I voluntarily gave up my Ford because my husband and I both lost our jobs the year before and our savings ran out. We had been making arrangements each month for the payments but finally, only after 3 months, the bank decided to say screw it and told me that I had to pay in full and that they couldn't help us anymore. And of course without having a job with no money, no insurance was on the truck either. So the bank found out about that and hit us with a double payment each month, equaling $805/month. Ridiculous. Obviously, we couldn't afford $400 per month so I'm not sure how they expected us to pay $805. Whatever.
So I voluntarily gave up my truck. The repo dude came by my house. Gave him the key. And he took off. About a couple months later I get this statement in the mail saying that the total loan was for about $24K but it only sold for $12K at the auction and there is a remaining $12K leftover that I am responsible for.
Yeah right. I absolutely have had no contact with them. I save all their letters but I do not talk to them or have any type of contact with them. This will be on my record for the next 7 years and I'm OK with that. I'm not OK with paying on a car that I do not have and that I could never afford anyway.
My best advice, if there is a loan amount left over... Have no contact with the creditors. If they contact your cell phone, it's illegal for them to do so.
Hope this helps. :-]
Wow, how can they exxpect you to pay for something you do not own anymore?
Wow, how can they exxpect you to pay for something you do not own anymore?
A better question would be how can a person who signs a contract with a bank where he or she agrees to borrow "X" number of dollars at an agreed upon interest rate, using a car as collateral, then expect the bank to just forgive the loan when they for whatever reason decide they no longer can afford to pay it? Banks are in the business of making money - they aren't giving money away. And the bank doesn't want the car - they just want their money back. And everyone knows (or should know) that a car depreciates as soon as you drive it off the lot, so it's not going to be worth what you paid for it from the get-go. And, it's not worth what you still owe on it until near the end of the term for the loan. So just "giving the car back" is not going to absolve you of your debt.
Yeah - its the same as in the mortgage foreclosure crisis. That's why originally (before the recent legislation??) any loan amount "forgiven" due to a foreclosure or short sale is taxable as Income.
I think it is the same in car repossession - but the difference is in car repossession they rarely forgive any amount.
We paid off my husbands car without quibbling -- well I paid it off, but my husband honestly was just a financially naive guy who got talked into a crap used car he couldn't afford -- he had no intention of defaulting or of somehow getting out of making the payments.
I'm always amazed at people who think they can walk away and make their payment disappear. The only way that happens is bankruptcy, and that's not even a guarantee any more. Its like people think they can act like a bankruptcy, without going through the legal part of actually proving that level of hardship.
I'm pretty sure only the government can garnish wages, I do not believe a bank can do it, especially on a collateral loan.
With that, I've seen this happen too. She might get collection calls for a while and either settle with them for pennies on the dollar or eventually the debt is written off. The bank took a risk. Isn't this why we have credit reports?
City Data, I could use some intel here.. about vehicles purchased for children, spouses, etc..
If X is on the vehicle loan solo.. but the vehicle is registered to both X & Y.. the vehicle gets repossessed.. does the repossession affect both X & Y's credit (?).. Or would the repo only negatively affect the borrower (X) ?
please advise.
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